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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
IDREAM.WS, INC.
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(Name of Small Business Issuer)
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California 33-0906294
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(State or Other Jurisdiction of I.R.S. Employer Identification Number
Incorporation or Organization)
3665 Ruffin Road, Suite 115
San Diego, CA 92123
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(Address of Principal Executive Offices including Zip Code)
858/546-2897
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(Issuer's Telephone Number)
Kennan E. Kaeder
Attorney at Law
110 West C Street, Suite 1904
San Diego, Ca 92101
Phone: (619)232-6545
Fax: (619) 236-8182
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(Name, address and telephone number of agent for service)
Securities to be Registered Under Section 12(b) of the Act:
None
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Securities to be Registered Under Section 12(g) of the Act:
Common Stock $.001 Par Value
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(Title of Class)
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TABLE OF CONTENTS
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PART I
ITEM 1. DESCRIPTION OF BUSINESS................................................3
ITEM 2. PLAN OF OPERATION......................................................8
ITEM 3. DESCRIPTION OF PROPERTY...............................................14
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT........14
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS..........14
ITEM 6. EXECUTIVE COMPENSATION................................................17
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................17
ITEM 8. DESCRIPTION OF SECURITIES.............................................17
PART F/S......................................................................22
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON COMMON EQUITY; OTHER MATTERS............32
ITEM 2. LEGAL PROCEEDINGS.....................................................31
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.........................32
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES...............................32
ITEM 5. INDEMNIFICATION OF OFFICERS AND DIRECTORS.............................32
PART III
ITEM 1. INDEX TO EXHIBITS.....................................................34
ITEM 2. DESCRIPTION OF EXHIBITS...............................................34
SIGNATURE.....................................................................34
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PART I
ITEM 1. BUSINESS.
Idream.ws, Inc. (the "Company") was incorporated on April 13, 2000 under
the laws of the State of California to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and acquisitions.
The Company has been in the developmental stage since inception and has no
operations to date other than issuing shares to its original shareholder.
The Company will attempt to locate and negotiate with a business entity for
the combination of that target company with the Company. The combination will
normally take the form of a merger, stock-for-stock exchange or stock-for-assets
exchange. In most instances the target company will wish to structure the
business combination to be within the definition of a tax-free reorganization
under Section 351 or Section 368 of the Internal Revenue Code of 1986, as
amended. No assurances can be given that the Company will be successful in
locating or negotiating with any Target Company.
The Company has been formed to provide a method for a foreign or domestic
private company to become a reporting ("public") company whose securities are
qualified for trading in the United States secondary market.
PERCEIVED BENEFITS
There are certain perceived benefits to being a reporting company with a
class of publicly traded securities. These are commonly thought to include the
following:
-- Shareholders ability to obtain more readily available information from the
Company
-- The ability to use registered securities to make acquisitions of Assets or
businesses;
-- Increased visibility in the financial community;
-- The facilitation of borrowing from financial institutions;
-- Improved trading efficiency;
-- shareholder liquidity;
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-- greater ease in subsequently raising capital;
-- compensation of key employees through stock options for which there may be
a market valuation;
-- enhanced corporate image;
-- a presence in the United States capital market.
POTENTIAL TARGET COMPANIES
A business entity, if any, which may be interested in a business
combination with the Company may include the following:
-- a company for which a primary purpose of becoming public is the use of its
securities for the acquisition of assets or businesses;
-- a company which is unable to find an underwriter of its securities or is
unable to find an underwriter of securities on terms acceptable to it;
-- a company which wishes to become public with less dilution of its common
stock than would occur upon an underwriting;
-- a company which believes that it will be able to obtain investment capital
on more favorable terms after it has become public;
-- a foreign company which may wish an initial entry into the United States
securities market;
-- a special situation company, such as a company seeking a public market to
satisfy redemption requirements under a qualified Employee Stock Option
Plan;
-- a company seeking one or more of the other perceived benefits of becoming a
public company.
A business combination with a target company will normally involve the
transfer to the target company of the majority of the issued and outstanding
common stock of the Company, and the substitution by the target company of its
own management and board of directors.
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No assurances can be given that the Company will be able to enter into a
business combination, as to the terms of a business combination, or as to the
nature of the target company.
The Company is voluntarily filing this Registration Statement with the
Securities and Exchange Commission and is under no obligation to do so under the
Securities Exchange Act of 1934.
RISK FACTORS
The Company's business is subject to numerous risk factors, including the
following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company has had no
operating history nor any revenues or earnings from operations. The Company has
no significant assets or financial resources. The Company will, in all
likelihood, sustain operating expenses without corresponding revenues, at least
until the consummation of a business combination. This may result in the Company
incurring a net operating loss which will increase continuously until the
Company can consummate a business combination with a target company. There is no
assurance that the Company can identify such a target company and consummate
such a business combination.
SPECULATIVE NATURE OF THE COMPANY'S PROPOSED OPERATIONS. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified target company.
While management will prefer business combinations with entities having
established operating histories, there can be no assurance that the Company will
be successful in locating candidates meeting such criteria. In the event the
Company completes a business combination, of which there can be no assurance,
the success of the Company's operations will be dependent upon management of the
target company and numerous other factors beyond the Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND COMBINATIONS. The
Company is and will continue to be an insignificant participant in the business
of seeking mergers with and acquisitions of business entities. A large number of
established and well-financed entities, including venture capital firms, are
active in mergers and acquisitions of companies which may be merger or
acquisition target candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise and managerial
capabilities than the Company and, consequently, the Company will be at a
competitive disadvantage in identifying possible business opportunities and
successfully completing a business combination. Moreover, the Company will also
compete with numerous other small public companies in seeking merger or
acquisition candidates.
IMPRACTICABILITY OF EXHAUSTIVE INVESTIGATION. The Company's limited funds and
the lack of full-time management will likely make it impracticable to conduct a
complete
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and exhaustive investigation and analysis of a target company. The decision to
enter into a business combination, therefore, will likely be made without
detailed feasibility studies, independent analysis, market surveys or similar
information which, if the Company had more funds available to it, would be
desirable. The Company will be particularly dependent in making decisions upon
information provided by the principals and advisors associated with the business
entity seeking the Company's participation.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION--NO STANDARDS FOR
BUSINESS COMBINATION. The Company has no current arrangement, agreement or
understanding with respect to engaging in a business combination with a specific
entity. There can be no assurance that the Company will be successful in
identifying and evaluating suitable business opportunities or in concluding a
business combination. Management has not identified any particular industry or
specific business within an industry for evaluation by the Company. There is no
assurance that the Company will be able to negotiate a business combination on
terms favorable to the Company. The Company has not established a specific
length of operating history or a specified level of earnings, assets, net worth
or other criteria which it will require a target company to have achieved, or
without which the Company would not consider a business combination with such
business entity. Accordingly, the Company may enter into a business combination
with a business entity having no significant operating history, losses, limited
or no potential for immediate earnings, limited assets, negative net worth or
other negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While seeking a
business combination, management anticipates devoting only a limited amount of
time per month to the business of the Company. The Company's sole officer has
not entered into a written employment agreement with the Company and he is not
expected to do so in the foreseeable future. The Company has not obtained key
man life insurance on its officer and director. Notwithstanding the combined
limited experience and time commitment of management, loss of the services of
this individual would adversely affect development of the Company's business and
its likelihood of continuing operations.
CONFLICTS OF INTEREST--GENERAL. The Company's officer and director participates
in other business ventures which may compete directly with the Company.
Additional conflicts of interest and non-arms length transactions may also arise
in the future. Management has adopted a policy that the Company will not seek a
business combination with any entity in which any member of management serves as
an officer, director or partner, or in which they or their family members own or
hold any ownership interest. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS--Conflicts of Interest."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Section 13 of the
Securities Exchange Act of 1934 (the "Exchange Act") requires companies subject
thereto to provide certain information about significant acquisitions including
audited
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financial statements for the company acquired covering one or two years,
depending on the relative size of the acquisition. The time and additional costs
that may be incurred by some target companies to prepare such financial
statements may significantly delay or essentially preclude consummation of an
otherwise desirable acquisition by the Company. Acquisition prospects that do
not have or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has neither
conducted, nor have others made available to it, market research indicating that
demand exists for the transactions contemplated by the Company. Even in the
event demand exists for a transaction of the type contemplated by the Company,
there is no assurance the Company will be successful in completing any such
business combination.
LACK OF DIVERSIFICATION. The Company's proposed operations, even if successful,
will in all likelihood result in the Company engaging in a business combination
with only one target company. Consequently, the Company's activities will be
limited to those engaged in by the business entity which the Company merges with
or acquires. The Company's inability to diversify its activities into a number
of areas may subject the Company to economic fluctuations within a particular
business or industry and therefore increase the risks associated with the
Company's operations.
REGULATION UNDER INVESTMENT COMPANY ACT. Although the Company will be subject to
regulation under the Exchange Act, management believes the Company will not be
subject to regulation under the Investment Company Act of 1940, insofar as the
Company will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
could subject the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination involving the
issuance of the Company's common stock will, in all likelihood, result in
shareholders of a target company obtaining a controlling interest in the
Company. Any such business combination may require shareholders of the Company
to sell or transfer all or a portion of the Company's common stock held by them.
The resulting change in control of the Company will likely result in removal of
the present officer and director of the Company and a corresponding reduction in
or elimination of his participation in the future affairs of the Company.
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REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS COMBINATION of the
Company. The Company's primary plan of operation is based upon a business
combination with a business entity which, in all likelihood, will result in the
Company issuing securities to shareholders of such business entity. The issuance
of previously authorized and unissued common stock of the Company would result
in reduction in percentage of shares owned by the present shareholders of the
Company and would most likely result in a change in control or management.
TAXATION. Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination the Company may undertake. Currently,
such transactions may be structured so as to result in tax-free treatment to
both companies, pursuant to various federal and state tax provisions. The
Company intends to structure any business combination so as to minimize the
federal and state tax consequences to both the Company and the target company;
however, there can be no assurance that such business combination will meet the
statutory requirements of a tax-free reorganization or that the parties will
obtain the intended tax-free treatment upon a transfer of stock or assets. A
non-qualifying reorganization could result in the imposition of both federal and
state taxes which may have an adverse effect on both parties to the transaction.
POSSIBLE RELIANCE UPON UNAUDITED FINANCIAL STATEMENTS. The Company will require
audited financial statements from any business entity that it proposes to
acquire. No assurance can be given, however, that audited financials will be
available to the Company prior to a business combination. In cases where audited
financials are unavailable, the Company will have to rely upon unaudited
information that has not been verified by outside auditors in making its
decision to engage in a transaction with the business entity. The lack of the
type of independent verification which audited financial statements would
provide increases the risk that the Company, in evaluating a transaction with
such a target company, will not have the benefit of full and accurate
information about the financial condition and operating history of the target
company. This risk increases the prospect that a business combination with such
a business entity might prove to be an unfavorable one for the Company.
COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000. Many existing computer programs use
only two digits to identify a year in such program's date field. These programs
were designed and developed without consideration of the impact of the change in
the century for which four digits will be required to accurately report the
date. If not corrected, many computer applications could fail or create
erroneous results by or following the year 2000 ("Year 2000 Problem"). The
companies or governments operating such programs have not corrected many of the
computer programs containing such date language problems. It is impossible to
predict what computer programs will be effected, the impact any such computer
disruption will have on other industries or commerce or the severity or duration
of a computer disruption.
The Company does not have operations and does not maintain computer systems.
Before the Company enters into any business combination, it may inquire as to
the status of any target
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company's Year 2000 Problem, the steps such target company has taken or intends
to take to correct any such problem and the probable impact on such target
company of any computer disruption. However, there can be no assurance that the
Company will not enter into a business combination with a target company that
has an uncorrected Year 2000 Problem or that any planned Year 2000 Problem
corrections will be sufficient. The extent of the Year 2000 Problem of a target
company may be impossible to ascertain and any impact on the Company will likely
be impossible to predict.
ITEM 2. PLAN OF OPERATION
The Company intends to enter into a business combination with a target
company in exchange for the Company's securities. As of the initial filing date
of this Registration Statement, neither the Company's officer and director nor
any affiliate has engaged in any negotiations with any representative of any
specific entity regarding the possibility of a business combination with the
Company.
Management anticipates seeking out a target company through solicitation.
Such solicitation may include newspaper or magazine advertisements, mailings and
other distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World Wide Web
sites and similar methods. No estimate can be made as to the number of persons
who will be contacted or solicited. Management may engage in such solicitation
directly or may employ one or more other entities to conduct or assist in such
solicitation. Management and its affiliates will pay referral fees to
consultants and others who refer target businesses for mergers into public
companies in which management and its affiliates have an interest. Payments are
made if a business combination occurs, and may consist of cash or a portion of
the stock in the Company retained by management and its affiliates, or both.
The Company has entered into an agreement with the law office of Kennan E.
Kaeder to supervise the search for target companies as potential candidates for
a business combination. The law office of Kennan E. Kaeder, will receive common
legal fees in consideration of its agreement to provide such services. The law
office of Kennan E. Kaeder will pay as its own expenses any costs it incurs in
supervising the search for a target company. The law office of Kennan E. Kaeder
is not authorized to enter into any agreement binding the Company, which can
only be done by action of the Company's officer, director and shareholders, as
may be required. The law office of Kennan E. Kaeder is not an affiliate of the
Company's management. See "ITEM 4: SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT."
The Company has no full time employees. The Company's president has agreed
to allocate a portion of his time to the activities of the Company, without
compensation. The president anticipates that the business plan of the Company
can be implemented by his devoting no more than 10 hours per month to the
business affairs of the Company and, consequently, conflicts of interest may
arise with respect to the limited time commitment by
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such officer. Management is not currently involved with other blank check
companies, but may become involved in creating additional blank check companies
similar to this one in the future. If management were to become involved with
creating other blank check companies, a conflict may arise in the event that
another blank check company with which management is affiliated is formed and
actively seeks a target company. Management anticipates that target companies
will be located for the Company and other blank check companies in chronological
order of the date of formation of such blank check companies or, in the case of
blank check companies formed on the same date, alphabetically. However, other
blank check companies with which management is or may be affiliated may differ
from the Company in certain items such as place of incorporation, number of
shares and shareholders, working capital, types of authorized securities, or
other items. It may be that a target company may be more suitable for or may
prefer a certain blank check company formed after the Company. In such case, a
business combination might be negotiated on behalf of the more suitable or
preferred blank check company regardless of date of formation.
The Certificate of Incorporation of the Company provides that the Company
may indemnify officers and/or directors of the Company for liabilities, which
can include liabilities arising under the securities laws. Therefore, assets of
the Company could be used or attached to satisfy any liabilities subject to such
indemnification.
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in a business entity which desires to seek the
perceived advantages of a corporation which has a class of securities registered
under the Exchange Act. The Company will not restrict its search to any specific
business, industry, or geographical location and the Company may participate in
a business venture of virtually any kind or nature. Management anticipates that
it will be able to participate in only one potential business venture because
the Company has nominal assets and limited financial resources. See ITEM F/S,
"FINANCIAL STATEMENTS." This lack of diversification should be considered a
substantial risk to the shareholders of the Company because it will not permit
the Company to offset potential losses from one venture against gains from
another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Management believes
(but has not conducted any research to confirm) that there are business entities
seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity
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for incentive stock options or similar benefits to key employees, increasing the
opportunity to use securities for acquisitions, providing liquidity for
shareholders and other factors. Business opportunities may be available in many
different industries and at various stages of development, all of which will
make the task of comparative investigation and analysis of such business
opportunities difficult and complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business entities with any cash or other assets. However,
management believes the Company will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in a
public company without incurring the cost and time required to conduct an
initial public offering. Management has not conducted market research and is not
aware of statistical data to support the perceived benefits of a business
combination for the owners of a target company.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officer and director of the Company, who is not a
professional business analyst. In analyzing prospective business opportunities,
management may consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, or trades; name
identification; and other relevant factors. This discussion of the proposed
criteria is not meant to be restrictive of the Company's virtually unlimited
discretion to search for and enter into potential business opportunities.
The Exchange Act requires that any merger or acquisition candidate comply
with certain reporting requirements, which include providing audited financial
statements to be included in the reporting filings made under the Exchange Act.
The Company will not acquire or merge with any company for which audited
financial statements cannot be obtained at or within the required period of time
after closing of the proposed transaction.
The Company may enter into a business combination with a business entity
that desires to establish a public trading market for its shares. A target
company may attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business combination with the
Company. Such consequences may include, but are not limited to, time delays of
the registration process, significant expenses to be incurred in such an
offering, loss of voting control to public shareholders or the inability to
obtain an underwriter or to obtain an underwriter on satisfactory terms.
The Company will not restrict its search for any specific kind of business
entities, but may acquire a venture which is in its preliminary or development
stage, which is already in
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operation, or in essentially any stage of its business life. It is impossible to
predict at this time the status of any business in which the Company may become
engaged, in that such business may need to seek additional capital, may desire
to have its shares publicly traded, or may seek other perceived advantages which
the Company may offer.
Management of the Company, which in all likelihood will not be experienced
in matters relating to the business of a target company, will rely upon its own
efforts in accomplishing the business purposes of the Company. Following a
business combination the Company may benefit from the services of others in
regard to accounting, legal services, and underwriting and corporate public
relations. If requested by a target company, management may recommend one or
more underwriters, financial advisors, accountants, public relations firms or
other consultants to provide such services.
A potential target company may have an agreement with a consultant or
advisor providing that services of the consultant or advisor be continued after
any business combination. Additionally, a target company may be presented to the
Company only on the condition that the services of a consultant or advisor be
continued after a merger or acquisition. Such preexisting agreements of target
companies for the continuation of the services of attorneys, accountants,
advisors or consultants could be a factor in the selection of a target company.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. On the
consummation of a transaction, it is likely that the present management and
shareholders of the Company will no longer be in control of the Company. In
addition, it is likely that the Company's officer and director will, as part of
the terms of the acquisition transaction, resign and be replaced by one or more
new officers and directors.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, it will be undertaken
by the surviving entity after the Company has entered into an agreement for a
business combination or has consummated a business combination and the Company
is no longer considered a blank check company. The issuance of additional
securities and their potential sale into any trading market which may develop in
the Company's securities may depress the market value of the Company's
securities in the future if such a market develops, of which there is no
assurance.
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While the terms of a business transaction to which the Company may be a
party cannot be predicted, it is expected that the parties to the business
transaction will desire to avoid the creation of a taxable event and thereby
structure the acquisition in a tax-free reorganization under Sections 351 or 368
of the Internal Revenue Code of 1986, as amended.
With respect to negotiations with a target company, management expects to
focus on the percentage of the Company which target company shareholders would
acquire in exchange for their shareholdings in the target company. Depending
upon, among other things, the target company's assets and liabilities, the
Company's shareholders will in all likelihood hold a substantially lesser
percentage ownership interest in the Company following any merger or
acquisition. The percentage of ownership may be subject to significant reduction
in the event the Company acquires a target company with substantial assets. Any
merger or acquisition effected by the Company can be expected to have a
significant dilutive effect on the percentage of shares held by the Company's
shareholders at such time.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing and will
include miscellaneous other terms.
The Company will not enter into a business combination with any entity
which cannot provide audited financial statements at or within the required
period of time after closing of the proposed transaction. The Company is subject
to all of the reporting requirements included in the Exchange Act. Included in
these requirements is the duty of the Company to file audited financial
statements as part of or within 60 days following the due date for filing its
Form 8-K which is required to be filed with the Securities and Exchange
Commission within 15 days following the completion of the business combination.
If such audited financial statements are not available at closing, or within
time parameters necessary to insure the Company's compliance with the
requirements of the Exchange Act, or if the audited financial statements
provided do not conform to the representations made by the target company, the
closing documents may provide that the proposed transaction will be voidable at
the discretion of the present management of the Company.
Management has orally agreed that it will advance to the Company any
additional funds which the Company needs for operating capital and for costs in
connection with searching for or completing an acquisition or merger. Such
advances will be made without expectation of repayment. There is no minimum or
maximum amount management will advance to the Company. The Company will not
borrow any funds to make any payments to the Company's management, its
affiliates or associates.
The Board of Directors has passed a resolution which contains a policy that
the Company will not seek a business combination with any entity in which the
Company's officer,
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director, shareholders or any affiliate or associate serves as an officer or
director or holds any ownership interest.
UNDERTAKINGS AND UNDERSTANDINGS REQUIRED OF TARGET COMPANIES As part of a
business combination agreement, the Company intends to obtain certain
representations and warranties from a target company as to its conduct following
the business combination. Such representations and warranties may include (i)
the agreement of the target company to make all necessary filings and to take
all other steps necessary to remain a reporting company under the Exchange Act
(ii) imposing certain restrictions on the timing and amount of the issuance of
additional free-trading stock, including stock registered on Form S-8 or issued
pursuant to Regulation S and (iii) giving assurances of ongoing compliance with
the Securities Act, the Exchange Act, the General Rules and Regulations of the
Securities and Exchange Commission, and other applicable laws, rules and
regulations.
A prospective target company should be aware that the market price and
volume of its securities, when and if listed for secondary trading, may depend
in great measure upon the willingness and efforts of successor management to
encourage interest in the Company within the United States financial community.
The Company does not have the market support of an underwriter that would
normally follow a public offering of its securities. Initial market makers are
likely to simply post bid and asked prices and are unlikely to take positions in
the Company's securities for their own account or customers without active
encouragement and a basis for doing so. In addition, certain market makers may
take short positions in the Company's securities, which may result in a
significant pressure on their market price. The Company may consider the ability
and commitment of a target company to actively encourage interest in its
securities following a business combination in deciding whether to enter into a
transaction with such company.
A business combination with the Company separates the process of becoming a
public company from the raising of investment capital. As a result, a business
combination with Company normally will not be a beneficial transaction for a
target company whose primary reason for becoming a public company is the
immediate infusion of capital. The Company may require assurances from the
target company that it has or that it has a reasonable belief that it will have
sufficient sources of capital to continue operations following the business
combination. However, it is possible that a target company may give such
assurances in error, or that the basis for such belief may change as a result of
circumstances beyond the control of the target company.
Prior to completion of a business combination, the Company will generally
require that it be provided with written materials regarding the target company
containing such items as a description of products, services and company
history; management resumes; financial information; available projections, with
related assumptions upon which they are based; an explanation of proprietary
products and services; evidence of existing patents, trademarks, or service
marks, or rights thereto; present and proposed forms of compensation to
management;
14
<PAGE>
a description of transactions between such company and its affiliates during
relevant periods; a description of present and required facilities; an analysis
of risks and competitive conditions; a financial plan of operation and estimated
capital requirements; audited financial statements, or if they are not
available, unaudited financial statements, together with reasonable assurances
that audited financial statements would be able to be produced within a
reasonable period of time not to exceed 75 days following completion of a
business combination; and other information deemed relevant.
COMPETITION
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's combined extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to acquire
any properties. The Company currently uses the offices of management at no cost
to the Company. Management has agreed to continue this arrangement until the
Company completes an acquisition or merger.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth each person known by the Company to be the
beneficial owner of five percent or more of the Company's Common Stock, all
directors individually and all directors and officers of the Company as a group.
Except as noted, each person has sole voting and investment power with respect
to the shares shown.
<TABLE>
<CAPTION>
Name and Address of Amount of Beneficial Percentage of Class
Beneficial Owner Ownership
<S> <C> <C>
Sheldon Silverman 5,000,000 Shares 100%
3665 Ruffin Road, Suite 115
San Diego, CA 92123
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Company has one Director and Officer as follows:
15
<PAGE>
<TABLE>
<CAPTION>
Name Age Position and Offices Held
---- --- -------------------------
<S> <C> <C>
Sheldon Silverman 38 President, Secretary, Treasurer,
Director
</TABLE>
There are no agreements or understandings for the officer or director to
resign at the request of another person and the above-named officer and director
is not acting on behalf of nor will act at the direction of any other person.
Set forth below is the name of the director and officer of the Company, all
positions and offices with the Company held, the period during which he has
served as such, and the business experience during at least the last five years:
Sheldon Silverman, acts as President, Secretary, Treasurer and Director for
the Company. Mr. Silverman has served as an Officer and Director of the Company
since inception. Mr. Silverman is also an officer and director of World Trade
Show.com, Inc., a business to business e-commerce provider that is organizing
and building a web site for trade shows.
CONFLICTS OF INTEREST
The Company's officer and director expects to organize other companies of a
similar nature and with a similar purpose as the Company. Consequently, there
are potential inherent conflicts of interest in acting as an officer and
director of the Company. Insofar as the officer and director is engaged in other
business activities, management anticipates that it will devote only a minor
amount of time to the Company's affairs. The Company does not have a right of
first refusal pertaining to opportunities that come to management's attention
insofar as such opportunities may relate to the Company's proposed business
operations.
A conflict may arise in the event that another blank check company with
which management is affiliated is formed and actively seeks a target company. It
is anticipated that target companies will be located for the Company and other
blank check companies in chronological order of the date of formation of such
blank check companies or, in the case of blank check companies formed on the
same date, alphabetically. However, any blank check companies with which
management is, or may be, affiliated may differ from the Company in certain
items such as place of incorporation, number of shares and shareholders, working
capital, types of authorized securities, or other items. It may be that a target
company may be more suitable for or may prefer a certain blank check company
formed after the Company. In such case, a business combination might be
negotiated on behalf of the more suitable or preferred blank check company
regardless of date of formation.
Mr. Silverman is an officer and a director of Worldtradeshow.com, Inc., an
e-commerce firm located in San Diego, California. As such, demands may be placed
on the time of Mr. Silverman which will detract from the amount of time he is
able to devote to the Company. Mr.
16
<PAGE>
Silverman intends to devote as much time to the activities of the Company as
required. However, should such a conflict arise, there is no assurance that Mr.
Silverman would not attend to other matters prior to those of the Company. Mr.
Silverman projects that initially up to ten hours per month of his time may be
spent locating a target company which amount of time would increase when the
analysis of, and negotiations and consummation with, a target company are
conducted.
The terms of business combination may include such terms as Mr. Silverman
remaining a director or officer of the Company. The terms of a business
combination may provide for a payment by cash or otherwise to Mr. Silverman for
the purchase or retirement of all or part of his common stock of the Company by
a target company or for services rendered incident to or following a business
combination. Mr. Silverman would directly benefit from such employment or
payment. Such benefits may influence Mr. Silverman's choice of a target company.
The Company may agree to pay finder's fees, as appropriate and allowed, to
unaffiliated persons who may bring a target company to the Company where that
reference results in a business combination. No finder's fee of any kind will be
paid by the Company to management or promoters of the Company or to their
associates or affiliates. No loans of any type have, or will be, made by the
Company to management or promoters of the Company or to any of their associates
or affiliates.
The Company will not enter into a business combination, or acquire any
assets of any kind for its securities, in which management of the Company or any
affiliates or associates have any interest, direct or indirect.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of interest in
favor of the Company could result in liability of management to the Company.
However, any attempt by shareholders to enforce a liability of management to the
Company would most likely be prohibitively expensive and time consuming.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Securities Act
of 1933 and the Securities Exchange Act of 1934, management believes the Company
will not be subject to regulation under the Investment Company Act of 1940
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a number of
entities the Company could be subject to regulation under the Investment Company
Act of 1940. In such event, the Company would be required to register as an
investment company and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company
17
<PAGE>
Act of 1940. Any violation of such Act would subject the Company to material
adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's officer and director does not receive any compensation for
his services rendered to the Company, has not received such compensation in the
past, and is not accruing any compensation pursuant to any agreement with the
Company. However, the officer and director of the Company anticipates receiving
benefits as a beneficial shareholder of the Company and, possibly, in other
ways. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Conflicts of Interest".
No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Company for the benefit of
its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company has issued a total of 5,000,000 shares of Common Stock to the
following persons for a total of $15,000 in cash:
<TABLE>
<CAPTION>
Name Number of Total Shares Consideration
---- ---------------------- -------------
<S> <C> <C>
Sheldon Silverman 5,000,000 $15,000.00
</TABLE>
Sheldon Silverman is the President, Treasurer, and sole Director for the
Company. The total number of shares were issued to Mr. Silverman were in
exchange for cash. Mr. Silverman may receive additional shares in exchange for
cash and/or for services in lieu of cash although there is no current agreement
with the Company to do so.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 100,000,000 shares
of Common Stock, par value $.001 per share. The company has authorized but has
not issued any Preferred Stock. The following statements relating to the capital
stock set forth the material terms of the Company's securities; however,
reference is made to the more detailed provisions of, and such statements are
qualified in their entirety by reference to, the Certificate of Incorporation
and the By-laws, copies of which are filed as exhibits to this registration
statement.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each share
on all matters to be voted on by the stockholders. Holders of common stock do
not have cumulative voting rights. Holders of common stock are entitled to share
ratably in dividends, if any, as may be declared from time to time by the Board
of Directors in its discretion from funds legally
18
<PAGE>
available therefore. In theevent of a liquidation, dissolution or winding up of
the Company, the holders of common stock are entitled to share pro rata all
assets remaining after payment in full of all liabilities. All of the
outstanding shares of common stock are fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the Company's
common stock. There are no conversion or redemption rights or sinking fund
provisions with respect to the common stock.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and
earnings, if any, capital requirements and financial conditions. The payment of
dividends, if any, will be within the discretion of the Company's Board of
Directors. The Company presently intends to retain all earnings, if any, for use
in its business operations and accordingly, the Board of Directors does not
anticipate declaring any dividends prior to a business combination.
TRADING OF SECURITIES IN SECONDARY MARKET
The National Securities Market Improvement Act of 1996 limited the
authority of states to impose restrictions upon sales of securities made
pursuant to Sections 4(1) and 4(3) of the Securities Act of companies which file
reports under Sections 13 or 15(d) of the Exchange Act. Upon effectiveness of
this Registration Statement, the Company will be required to, and will, file
reports under Section 13 of the Exchange Act. As a result, sales of the
Company's common stock in the secondary market by the holders thereof may then
be made pursuant to Section 4(1) of the Securities Act (sales other than by an
issuer, underwriter or broker).
Following a business combination, a target company will normally wish to
list the Company's common stock for trading in one or more United States
markets. The target company may elect to apply for such listing immediately
following the business combination or at some later time.
In order to qualify for listing on the NASDAQ SmallCap Market, a company
must have at least (i) net tangible assets of $4,000,000 or market
capitalization of $50,000,000 or net income for two of the last three years of
$750,000; (ii) public float of 1,000,000 shares with a market value of
$5,000,000; (iii) a bid price of $4.00; (iv) three market makers; (v) 300
shareholders and (vi) an operating history of one year or, if less than one
year, $50,000,000 in market capitalization. For continued listing on the NASDAQ
SmallCap Market, a company must have at least (i) net tangible assets of
$2,000,000 or market capitalization of $35,000,000 or net income for two of the
last three years of $500,000; (ii) a public float of 500,000 shares with a
market value of $1,000,000; (iii) a bid price of $1.00; (iv) two market makers;
and (v) 300 shareholders.
19
<PAGE>
If, after a business combination, the Company does not meet the
qualifications for listing on the NASDAQ SmallCap Market, the Company's may
apply for quotation of its securities on the NASD OTC Bulletin Board. In certain
cases the Company may elect to have its securities initially quoted in the "pink
sheets" published by the National Quotation Bureau, Inc.
TRANSFER AGENT
It is anticipated that the Company will act as it's own transfer agent for
the common stock of the Company.
GLOSSARY
<TABLE>
<S> <C>
"Blank Check" Company As defined in Section 7(b)(3) of the
Securities Act, a "blank check" company
is a development stage company that has
no specific business plan or purpose or
has indicated that its business plan is
to engage in a merger or acquisition
with an unidentified company or
companies and is issuing "penny stock"
securities as defined in Rule 3a51-1 of
the Exchange Act.
Business Combination Normally a merger,
stock-for-stock exchange or
stock-for-assets exchange between the
Registrant and a target company.
The Company or the Registrant The corporation whose common stock is
the subject of this Registration
Statement.
Exchange Act The Securities Exchange Act of 1934, as
amended
"Penny Stock" Security As defined in Rule 3a51-1 of the
Exchange Act, a "penny stock" security
is any equity security other than a
security (i) that is a reported security
(ii) that is issued by an investment
company (iii) that is a put or call
issued by the Option Clearing
Corporation (iv) that has a price of
$5.00 or more (except for purposes of
Rule 419 of the Securities Act) (v) that
is registered on
</TABLE>
20
<PAGE>
<TABLE>
<S> <C>
a national securities exchange (vi) that
is authorized for quotation on the
NASDAQ Stock Market, unless other
provisions of Rule 3a51-1 are not
satisfied, or (vii) that is issued by an
issuer with (a) net tangible assets in
excess of $2,000,000, if in continuous
operation for more than three years or
$5,000,000 if in operation for less than
three years or (b) average revenue of at
least $6,000,000 for the last three
years.
Securities Act The Securities Act of 1933, as amended.
</TABLE>
21
<PAGE>
PART F/S
IDREAM.WS, INC.
(a development stage company)
Financial Statements
Period ended May 31, 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Independent Auditors' Report 23
Financial Statements:
Balance Sheet 24
Statements of Operations 25
Statements of Stockholders' Equity 26
Statements of Cash Flows 27
Notes to Financial Statements 28
</TABLE>
22
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Shareholder
Idream.ws, Inc.
We have audited the accompanying balance sheet of Idream.ws, Inc. (a development
stage company) as of May 31, 2000, and the related statement of operations,
shareholders' equity and cash flows for the period from inception (April 17,
2000) to May 31, 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes, on a test basis, examination of evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Idream.ws, Inc. as of May 31,
2000, and the results of operations and their cash flows for the period from
inception (April 17, 2000) to May 31, 2000, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company cannot successfully implement its operating
plan without raising additional capital. Management's plans regarding those
matters are also described in Note 4. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ Siegel, Smith & Garber, LLP
SIEGEL,SMITH & GARBER, LLP
Certified Public Accountants
Del Mar, California
July 10, 2000
23
<PAGE>
IDREAM.WS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
MAY 31, 2000
<TABLE>
<CAPTION>
IN DOLLARS
-------------------------------------------------------------------------------
ASSETS
<S> <C>
Cash $ 9
Organization Costs 115
--------
Total Assets $ 124
========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 25
Accrued expenses 18,115
--------
Total current liabilities 18,140
COMMITMENTS AND CONTINGENCIES --
SHAREHOLDERS' EQUITY
Common stock, $0.001par value, 100,000,000 shares authorized
5,000,000 shares issued and outstanding 5,000
Additional paid-in-capital 10,000
Subscription receivable (15,000)
Accumulated deficit - during development stage (18,016)
--------
Total shareholders' equity (18,016)
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 124
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
IDREAM.WS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FROM INCEPTION (APRIL 17, 2000) THROUGH MAY 31, 2000
<TABLE>
<CAPTION>
IN DOLLARS, EXCEPT PER SHARE AMOUNTS
===============================================================================
<S> <C>
REVENUES
Sales $ --
--------
Total Revenue --
ADMINISTRATIVE EXPENSES
Legal and professional 18,000
Office expense 16
--------
Total expenses 18,016
--------
Net loss $(18,016)
========
BASIC AND DILUTED NET LOSS PER SHARE $ (0.004)
========
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING $ (0.004)
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
IDREAM.WS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY
FROM INCEPTION (APRIL 17, 2000) THROUGH MAY 31, 2000
<TABLE>
<CAPTION>
IN DOLLARS, EXCEPT SHARES AND PER SHARE DATA
===================================================================================================================================
Deficit
Accumulated Common Stock Total
COMMON STOCK Additional during the Subscription Shareholders'
Description Shares Per share Total Paid in Capital Development Stage Receivable Equity
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
BEGINNING BALANCE -- $ -- $ -- $ -- $ -- $ -- $ --
ISSUANCE OF SHARES FOR
SUBSCRIPTION RECEIVABLE 5,000,000 0 5,000 10,000 (15,000) --
NET LOSS (18,016) (18,016)
--------- ------- -------- -------- -------- --------
BALANCE, May 31, 2000 5,000,000 $ 5,000 $ 10,000 $(18,016) $(15,000) $(18,016)
========= ======= ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
IDREAM.WS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FROM INCEPTION (APRIL 17, 2000) THROUGH MAY 31, 2000
<TABLE>
<CAPTION>
IN DOLLARS
-------------------------------------------------------------------------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(18,016)
Adjustments to reconcile net income to net cash
provided by operating activities:
Increase in organization costs (115)
Increase in accounts payable and accrued liabilites 18,140
--------
Net Cash Used by Operating Activities
9
CASH FLOWS FROM INVESTING ACTIVITIES --
CASH FLOWS FROM FINANCING ACTIVITIES --
Net increase in cash 9
Cash, at inception (April 17, 2000) --
--------
Cash, May 31, 2000 $ 9
========
NON CASH FINANCING ACTIVITIES:
Issuance of common stock for subscription receivable $ 15,000
========
</TABLE>
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS OF
IDREAM.WS, INC.
FOR THE PERIOD ENDING MAY 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Idream.ws, Inc., a California corporation, was formed on April 17, 2000
to acquire an interest in a business entity that desires to seek the
perceived advantages of a corporation which has securities registered
under the Exchange Act. The Company has not commenced planned principal
operations and, therefore, is considered to be in the development
stage.
ACCOUNTING METHOD
The Company records income and expenses on the accrual method.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of expenses
during the reporting period. Actual results could differ from those
estimates.
INCOME TAXES
The Company reports certain expenses differently for financial and tax
reporting purposes and, accordingly, provides for the related deferred
taxes. Income taxes are accounted for und the liability method in
accordance with SFAS 109, ACCOUNTING FOR INCOME TAXES.
CASH AND CASH EQUIVALENTS
The Company considers all liquid investments with the maturity of three
months or less from the date of purchase that are readily convertible
into cash to be cash equivalents.
RESEARCH AND DEVELOPMENT COSTS
Costs and expenses that can be clearly identified as research and
development are charged to expense as incurred in accordance with SFAS
2, ACCOUNTING FOR RESEARCH AND DEVELOPMENT COSTS. The Company has no
research and development costs for the period reported.
LONG-LIVED ASSETS
The Company will record potential impairments to its long-lived assets
when there is evidence that events or changes in circumstances have
made recovery of the asset's carrying value unlikely. An impairment
loss would be recognized
28
<PAGE>
when the sum of the expected future undiscounted net cash flows is less
than the carrying amount of the asset. The Company has identified no
such impairment losses. All of the Company's long-lived assets reside
in the United States.
ADVERTISING COSTS
Advertising costs will be expensed as incurred. There was no
advertising expense incurred for the period from inception through May
31, 2000.
BASIC AND DILUTED NET LOSS PER SHARE
Net loss per share is calculated in accordance with SFAS No. 128,
EARNINGS PER SHARE for the period presented. Basic net loss per share
is based upon the weighted average number of common shares outstanding.
Diluted net loss per share is based on the assumption that all dilative
convertible shares and stock options were converted or exercised.
Dilution is computed by applying the treasury stock method. Under this
method, options and warrants are assumed to be exercised at the
beginning of the period (or at the time of issuance, if later), and as
if funds obtained thereby wee used to purchase common stock at the
average market price during the period.
The Company has no potentially dilative securities, options, warrants
or other rights outstanding. Therefore, basic and diluted net loss per
share is the same.
REPORTABLE OPERATING SEGMENTS
SFAS No. 131, SEGMENT INFORMATION, amends the requirements for
companies to report financial and descriptive information about their
reportable operating segments. Operating segments, as defined in SFAS
No. 131, are components of an enterprise for which separate financial
information is available and is evaluated regularly by a company in
deciding how to allocate resources and in assessing performance. The
financial information is required to be reported on the basis that is
used internally for evaluating segment performance. The Company intends
to operate one business and operating segment.
NOTE 2 - SHAREHOLDERS' EQUITY
COMMON STOCK
In May 2000, the Company issued 5,000,000 shares of common stock to a
single shareholder for a $15,000 subscription receivable.
NOTE 3 - COMMITMENTS
The Company has made no commitments for the period reported.
NOTE 4 - GOING CONCERN
29
<PAGE>
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. This basis of accounting
contemplates the recovery of the Company's assets and the satisfaction
of its liabilities in the normal course of business. Since inception,
the Company has not been engaged in any organizational activities and
does not intend to start operational activities. Through May 31, 2000,
the Company had incurred losses of $18,016. Successful completion of
the Company's business plan is dependent upon obtaining a suitable
merger candidate and completing the merger. Management anticipates that
the cash requirements to locate, negotiate and complete a business
combination will require additional fundraising.
NOTE 5 - SUBSEQUENT EVENT
In June 2000, the Company collected $15,000 for the common stock
subscription receivable.
30
<PAGE>
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(A) MARKET PRICE. There is no trading market for the Company's Common
Stock at present and there has been no trading market to date. There is no
assurance that a trading market will ever develop or, if such a market does
develop, that it will continue.
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
(B) HOLDERS. There is one holder of the Company's Common Stock. The
issued and outstanding shares of the Company's Common Stock were issued in
accordance with the exemptions from registration afforded by Section 4(2) of the
Securities Act of 1933 promulgated thereunder.
(C) DIVIDENDS. The Company has not paid any dividends to date, and has
no plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
II-1
<PAGE>
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company has not changed accountants since its formation and there
are no disagreements with the findings of its accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company has sold securities which were
not registered as follows:
<TABLE>
<CAPTION>
Date Name Number of Shares Consideration
<S> <C> <C> <C>
May 31, 2000 Sheldon Silverman 5,000,000 $15,000
</TABLE>
Mr. Silverman is the sole director, controlling shareholder and
president of the Company. Sales made to Mr. Silverman were in return for cash.
With respect to the sales made to Mr. Silverman, the Company relied upon Section
4(2) of the Securities Act of 1933, as amended and Rule 506 promulgated
thereunder.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to in Section 317 of the California Corporations Code and our
Articles of Incorporation and bylaws provide for the indemnification of present
and former directors and officers and each person who serves at our request as
our officer or director. Indemnification for a director is mandatory and
indemnification for an officer, agent or employee is permissive. We will
indemnify such individuals against all costs, expenses and liabilities incurred
in a threatened, pending or completed action, suit or proceeding brought because
such individual is our director or officer. Such individual must have conducted
himself in good faith and reasonably believed that his conduct was in, or not
opposed to, our best interest. In a criminal action he must not have had a
reasonable cause to believe his conduct was unlawful. This right of
indemnification shall not exclusive of other rights the individual is entitled
to as a matter of law or otherwise.
We will not indemnify an individual adjudged liable due to his
negligence or willful misconduct toward us, adjudged liable to us, or if he
improperly received personal benefit. Indemnification in a derivative action is
limited to reasonable expenses incurred in connection with the proceeding. Also,
we are authorized to purchase insurance on behalf of an individual for
liabilities incurred whether or not we would have the power or obligation to
indemnify him pursuant to our bylaws.
Our bylaws provide that individuals may receive advances for expenses
if the individual provides a written affirmation of his good faith belief that
he has met the
II-2
<PAGE>
appropriate standards of conduct and he will repay the advance if
he is judged not to have met the standard of conduct.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS
CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE OPINION
OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST
PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
II-3
<PAGE>
PART III
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<S> <C>
ITEM 1 AND 2. INDEX TO EXHIBITS AND DESCRIPTION OF EXHIBITS
EXHIBIT 2. ARTICLES OF INCORPORATION AND BYLAWS..............................
EXHIBIT 23. CONSENT OF INDEPENDENT AUDITORS...................................
EXHIBIT 27. FINANCIAL DATA SCHEDULE...........................................
</TABLE>
COMPANY SIGNATURE
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
IDREAM.WS, INC.
By: Sheldon Silverman Date: August 4, 2000
/s/Sheldon Silverman
Sheldon Silverman
Chief Financial Officer
